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Harvey's Health Food Store has estimated monthly current asset financing requirements for the next six months as follows: Current Assets January February March April May
Harvey's Health Food Store has estimated monthly current asset financing requirements for the next six months as follows: Current Assets January February March April May June Temporary $6,000 $1,000 $2,000 $6,500 $5,000 $2,000 Permanent $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Pro ed annual bori ing rates for the next six months are: January February March April May June Short-Term 7.0% 8.0% 11.0% 14.0% 11.0% 11.0% Long-Term 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% Required: 1. Assuming the company follows the hedging strategy, calculate the TOTAL dollar interest payments for the six months. 2. If the company implemented a risky strategy would you expect total dollar interest payments to be higher or lower, briefly explain your answer (calculation not required)
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